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Does anybody know how Initial Margin is calculated as a function of the price?

The formula is empiric, however, now it's 75% of the maximum possible variation margin within given trading limits.

Or using simple words: if one buys 1 contract at the highest price of the trading range, and then sells it at the lowest possible price - this gives max. possible loss for the current session. Variation margin is set to 75% of this percent.

Now, for example, if you want to buy 100 contracts worth of $1000 in total, the initial margin required would be 7 BTC (or roughly $140).

The formula is empiric, however, now it's 75% of the maximum possible variation margin within given trading limits.

"Maximum price change within one trading session: 10% in each direction relative to the close price of the last trading session."

What's is going to happen if the price breaks the trading limits during the current session?

It cannot. You can only place bids/asks within the limit, and cannot accept bids/asks outside the 10% limit either. But as I understand it, Fireball reserves the right to make an extra clearing (and thus start a new trading session and move the 10% frame) in case of extraordinary volatility.

I'm rolling up a few updates to the website, so it may be on and off till night (european time). If you're logged in, your trading is not going to be affected. Trying to make downtime as small as possible.

Ok, finally the improved web design is up on Icbit. There are still a few minor things to fix here and there, but overall it should make the experience of using Icbit web site more smooth and easier to learn.

I think that the current trading fee is already huge (1.1% and 2.2% for opened and closed trade). It will soon be untradable if the BTC price goes higher which is rather probable.

A few comments:- The ultimate goal is to break depends on fiat currencies, be it USD, EUR or whatever else. So recalculating a fee based on BTC/USD rate would not be really correct (e.g. if the contract is for 100kg of potatoes, and quoted in potatoes kg per 1 BTC, you're saying that the fee calculated in potatoes is too high, because BTC rose in value)- We really avoid changing contract specification of a contract which already trades. So if BTC rises in value too much, new contract will be adjusted for that, and the fees lowered.- These fees are not really to fill my own pocket. Fees are used to insure against non-paying users. And since all accounting is performed in Bitcoins (my dream which came to reality), I see no reason to make fees dependent on USD.

And some ideas we are considering to implement in future:- Discounts for high volume traders.- Discounts for liquidity providers.

And finally, could someone tell me, what "fees" (effective) were on the infamous Bitcoinica?

A comment about the first comment. If the "ultimate goal is to break... bla bla bla..." so why the contract itself is calculated in USD not in BTC? If the contract was calculated in BTC the fee would not rise with the USD/BTC rate and remained steady.

Bitcoinnica was a looting operation. If you justify current fees by being similar you are effectively saying that icbit.se is a looting operation too. And with such high fees it actually is.

A comment about the first comment. If the "ultimate goal is to break... bla bla bla..." so why the contract itself is calculated in USD not in BTC? If the contract was calculated in BTC the fee would not rise with the USD/BTC rate and remained steady.

Variation Margin is calculated in BTC, so you get BTC as profit, not USD. It's up to you how to use this profit - convert to USD, or buy something directly. You're not obliged to sell your profit for USD.The contract price is quoted in USD though, because USD per BTC is way more common in Bitcoin community than BTC per USD. The math is that you can convert one to another by doing 1/x operation (23.55 USD per 1 BTC equals to 0.0424628 BTC per 1 USD).

Bitcoinnica was a looting operation. If you justify current fees by being similar you are effectively saying that icbit.se is a looting operation too. And with such high fees it actually is.

You know the fee beforehand, so I really think it is unfair to call it looting. Bitcoinica lost all its customers' money, the customers did not know beforehand (obviously), although it looked more like incompetence than looting.

(e.g. if the contract is for 100kg of potatoes, and quoted in potatoes kg per 1 BTC, you're saying that the fee calculated in potatoes is too high, because BTC rose in value)

If the price of potatoes drop dramatically, a potato trading company would not be able to keep the same fee/markup in whatever currency they use, but would have to lower it proportionally to the dropping price.

You know the fee beforehand, so I really think it is unfair to call it looting.

Try to find it on the icbit.se website.

It's stated right in the create order window, which you use to issue buy or sell orders, right below the total value and initial margin value. It's specifically put there so that users would clearly see the fee.

The fee is constant, and doesn't vary like it does in services using FOREX trading model with spread (which can be either narrow or wide).